Potential DMCA Game Change in 2d Circuit Ruling on Viacom v. YouTube

By J. DeVoy

The Second Circuit released its opinion in Viacom v. YouTube today, partially vacating the Southern District of New York’s order granting summary judgment in favor of the online video service. Ultimately, the case is to be remanded to the district court for fact-finding on whether YouTube had knowledge of infringement, had the right and ability to control infringing content, and YouTube’s willful blindness.

Almost as soon as the Court starts writing, it delivers the gut punch:

Although the District Court correctly held that the § 512(c) safe harbor requires knowledge or awareness of specific infringing activity, we vacate the order granting summary judgment because a reasonable jury could find that YouTube had actual knowledge or awareness of specific infringing activity on its website. We further hold that the District Court erred by interpreting the “right and ability to control” infringing activity to require “item-specific” knowledge. (Opinion at 2)

While the Second Circuit held that YouTube qualified for DMCA protections under § 512(c), the easy work of the opinion ends there. What follows are a range of questions that the Second Circuit believed needed to be supported by more facts – potentially changing the landscape for user-generated content.

The Second Circuit is not interested in relegating the operators of user-generated content services to constantly policing their sites for infringement, and believe that § 512(c)(1)(A) does not require this conduct:

Under § 512(c)(1)(A), knowledge or awareness alone does not disqualify the service provider; rather, the provider that gains knowledge or awareness of infringing activity retains safe-harbor protection if it “acts expeditiously to remove, or disable access to, the material.” 17 U.S.C. § 512(c)(1)(A)(iii). Thus, the nature of the removal obligation itself contemplates knowledge or awareness of specific infringing material, because expeditious removal is possible only if the service provider knows with particularity which items to remove. Indeed, to require expeditious removal in the absence of specific knowledge or awareness would be to mandate an amorphous obligation to “take commercially reasonable steps” in response to a generalized awareness of infringement. Viacom Br. 33. Such a view cannot be reconciled with the language of the statute, which requires “expeditious[ ]” action to remove or disable “the material” at issue. 17 U.S.C. § 512(c)(1)(A)(iii) (emphasis added). (Opinion at 16)

However, this does not absolve YouTube for potential liability for red flag knowledge. Since the internet has changed much since the DMCA’s enactment, the examples of red-flag knowledge articulated by Congress are largely inapplicable now. Those availing themselves of these protections hold up the examples of red-flag knowledge described by the Senate (e.g., domain names with words like “illegal,” “stolen” or “pirate” in them), while copyright enforcers have advocated for a broader standard of red flag knowledge, along the lines of “I know it when I see it.” Seeing this hole in the law, the Second Circuit tried to reconcile a question a question that has befuddled many a copyright lawyer: What the hell, exactly, is red flag knowledge?

The difference between actual and red flag knowledge is thus not between specific and generalized knowledge, but instead between a subjective and an objective standard. In other words, the actual knowledge provision turns on whether the provider actually or “subjectively” knew of specific infringement, while the red flag provision turns on whether the provider was subjectively aware of facts that would have made the specific infringement “objectively” obvious to a reasonable person. The red flag provision, because it incorporates an objective standard, is not swallowed up by the actual knowledge provision under our construction of the § 512(c) safe harbor. Both provisions do independent work, and both apply only to specific instances of infringement. (Opinion at 17-18)

Actually proving red flag knowledge is a factual question. It is also part of the reason the case is remanded to the S.D.N.Y. Indeed, the Court of Appeals spends pages reviewing and discussing the record evidence it believes creates a question of fact as to whether YouTube had actual knowledge of infringement on its service. (Opinion at 19-22) The same is true of willful blindness, the equivalent of knowledge in copyright cases. (Opinion at 19-24)

As to the “right and ability” to control user-uploaded content under § 512(c)(1)(B), the Second Circuit also remanded this issue to the District Court for further fact-finding. The Court of appeals rejected both interpretations of this standard as advanced by the parties – for Viacom, a codification of common law vicarious liability standards; and for YouTube, a requirement that the provider must know of the particular case before it can control the infringement. (Opinion at 19-25) The court agreed that the right and ability to control under § 512(c)(1)(B) requires more than the mere ability to remove or block access to materials on the defendant’s website – but how much more, or what that “more” might be, is unclear – other than the fact that it does not require specific knowledge.

Another issue remanded to the District Court is the question of YouTube’s syndication of its videos to others:

In or around March 2007, YouTube transcoded a select number of videos into a format compatible with mobile devices and “syndicated” or licensed the videos to Verizon Wireless and other companies. The plaintiffs argue—with some force—that business transactions do not occur at the “direction of a user” within the meaning of § 512(c)(1) when they involve the manual selection of copyrighted material for licensing to a third party. The parties do not dispute, however, that none of the clips-in-suit were among the approximately 2,000 videos provided to Verizon Wireless. In order to avoid rendering an advisory opinion on the outer boundaries of the storage provision, we remand for fact-finding on the question of whether any of the clips-in-suit were in fact syndicated to any other third party. (Opinion at 31-32)

The court rounds out its opinion by considering YouTube’s repeat infringer policy and other software tools used to avoid the posting of infringing content. Neither are sufficient to exclude YouTube from the safe harbor provisions of § 512(c). Because more fact-finding is needed, the Court of Appeals declined to determine whether the trial court erred in denying Viacom’s cross-motion for summary judgment.

While not likely to become an AlamedaBooks, this litigation is far from over. Even if Youtube had won, Viacom likely would have petitioned the Supreme Court for certiorari. Based on the Grokster case, there is some likelihood the Supreme Court would have granted it. But by sending the case down to the S.D.N.Y. yet again, another appeal to the Second Circuit is all but ensured.

Share this:

Like this:

LikeLoading...

Related

This entry was posted on Thursday, April 5th, 2012 at 1:12 pm and is filed under copyright, internet law, ip, law practice. You can follow any responses to this entry through the RSS 2.0 feed.
Both comments and pings are currently closed.

[…] of the district court’s comprehensive judgment in YouTube’s favor — but notwithstanding the considerable hand-wringing already underway about how terrible a result this is, I’m here to tell you: It ain’t so bad. In fact, I […]

[…] derivative works, much work needs to be done with respect to fighting infringement, even as the law for doing so remains in flux. Share this:StumbleUponDiggRedditFacebookTwitterLike this:LikeBe the first to like […]